Comparative analysis of industrial policies: Gujarat, Maharashtra and Tamil Nadu
Prior to 2000, all states used to offer fiscal incentives in terms of capital and interest subsidy and waiving of state sales tax to attract industrial investments. The comparison of the industrial policies of many states has highlighted that there were no major differences in the nature and content of the incentives across the states during that time (Awasthi, 1999).
The post-2000 industrial policies of competing industrialised states, i.e. Gujarat, Maharashtra and Tamil Nadu, have been studied to compare and understand the approach adopted by these states to promote industrialisation, especially the provisions made for the polluting industries and the infrastructure for environment protection. The policies (Industrial Policy, 2003 for Gujarat, Industrial Policy, 2006 for Maharashtra and Industrial Policy, 2007 for Tamil Nadu) have similar provisions for building and upgrading infrastructure, easing procedural bottlenecks, developing human resources, reviving sick units and strengthening SMEs, etc. The policies for Maharashtra and Tamil Nadu (GOM, 2006; GOT, 2007 have continued to provide capital subsidies for new and expansion units, whereas Gujarat has done away with it outside of a provision for power looms. A lot of other fiscal incentives have been stated in the Maharashtra Policy for units to be located in districts with ‘No Industry’ or districts which are low on the human development index (HDI). Tamil Nadu has many incentives for mega units whereas Maharashtra has provided for customised incentives on a case-to-case basis. Gujarat has been more aggressive in making land and infrastructure available for industries.
The industrial policies of Gujarat and Tamil Nadu encourage polluting industries to be located in the industrial cluster so that they can have common environment management facilities and provisions for common environment infrastructure like CETPs, TSDFs, waste-water recycling and cleaner production. The Tamil Nadu policy has fiscal incentives even for the individual ETPs which actually means deviating from the ‘polluter pays principle.’ The policy for Gujarat has included many more initiatives like environmental zoning and mapping of all districts, water and air quality monitoring, development of new industrial estates based on REIA (Regional Environmental Impact Assessment), carrying capacity study of the region, monitoring and analysis through private accredited consultants and ISO 14000 certification, etc. Maharashtra has not included any provision for environment protection in its Industrial Policy, 2006.
The Industrial Policy 2009 of Gujarat continued with the initiative taken in the earlier policy and added many more provisions to those initiatives to attract industrial investments. A new category of mega projects was added, and special customised incentives were offered on a case-to-case basis. The development of SIRs was proposed. Many initiatives for the provision of land for mega projects and other industrial investments were suggested. Environment was accorded the status of infrastructure and measures for environment protection were extended to include PPP and many more projects like incinerators, co-incinerators, solvent recovery, reducing carbon footprint, gaining carbon credits and energy and water conservation, etc.
The Industrial Policy 2013 for Maharashtra continued with the fiscal incentives for industries located in the relatively backward areas or in 'No Industry’ district and Naxalism-affected areas. The policy has addressed the issue of providing land for industrial purposes. The Maharashtra Industrial Development Corporation (MIDC) was proposed as the key agency to provide land. For existing units, it was suggested to increase the Floor Space Index (FSI) by charging a premium. There was also a suggestion to develop areas under the de-notified Special Economic Zones (SEZs) for industrial purposes. The initiatives for mega units and other provisions have continued from the previous policy. Initiatives for environmental protection include water and energy audit, CETP, TSDF, waste-water recycling and rainwater harvesting.
In addition to the earlier initiatives, the Industrial Policy 2014 of Tamil Nadu included the development of southern districts, the development of Special Investment Regions, PPP for waste-water treatment and recycling plants, TSDF in all major industrial parks and SEZs and more. It has provided special fiscal incentives for Mega25, Super Mega A2'1, Super Mega B27 and Ultra Mega28 projects.
The recent policy statements of the most industrialised states in India highlight that environment protection has been included by all of them as a thematic concern. A summary of initiatives proposed in the Industrial Policies of the three competing industrial states is presented in Table 3.2.
